Federal Trade Commission studies USPS unfair advantages

“On December 20, 2006, President Bush signed the Postal Accountability and Enhancement Act into law. Congress intended the PAEA to increase competition and efficiency in the provision of mail service. The Act requires the Federal Trade Commission to prepare and submit to the President, Congress, and the Postal Regulatory Commission a comprehensive report by December 20, 2007, identifying Federal and State laws that apply differently to the United States Postal Service with respect to the competitive category of mail and to private companies providing similar products. To help prepare this report, the Commission is requesting public comment on several issues.”

From reader: “This was one of the provisions in the PAEA that APWU President Burrus warned about. A comprehensive report by the FTC identifying USPS advantages over private companies will lead to more regulation of the USPS.”

“I’m surprised that the NALC President failed to get language in the PAEA restricting contracting out, at least for his members. He has known of the problem for some time (see Tobin 2004 arbitration award (PDF). The NALC in the case failed to cite Postal Operations Manual 532.1, 644.2a and 663.2a, choosing to rely upon Article 32 instead. Big mistake! The case arose in 2002, a year before POM 532.1 was changed to remove the limitation “in sparsely populated areas” for Highway Contract Routes. The NALC did not challenge this change to the POM in 2003. Second mistake! Let’s hope there won’t be a third.”

The Federal Register notice further states:

The Act further prohibits the USPS, and other Federal agencies acting in concert with it or on its behalf, from engaging in conduct–with respect to any product not covered by the statutory postal monopoly provision–that constitutes an unfair method of competition, in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45(a), or otherwise violates the antitrust laws, as defined in the Clayton Act, 15 U.S.C. 12(a).\13\ In addition, the Act expressly prohibits the USPS from engaging in conduct that constitutes an unfair or deceptive act or practice, in violation of Section 5 of the FTC Act.\14\

FTC Study

The PAEA directs the Commission to prepare and submit to the President, Congress, and the PRC, a comprehensive report “identifying Federal and State laws that apply differently to the [USPS] with respect to the competitive category of mail * * * and to private companies providing similar products.” \15\ The report must include such recommendations as the FTC “considers appropriate for bringing such legal differences to an end,” and “in the interim,” to account–under the PRC’s regulations that will prohibit subsidization of competitive products–“for the net economic effects provided by those laws.” \16\ In preparing this report, the Act requires the Commission to consult with the USPS, the PRC, other Federal agencies, mailers, private companies that provide delivery services, and the general public.\17\